As Theresa Gattung bailed ship just before it sunk the new captain, Dr Paul Reynolds, has taken on a heavy cargo. Profits dived about 25% just at the time Theresa left – nice timing!
The acquisition of PowerTel by AAPT looks dubious at best - seen as some as “another waste of shareholders’ funds”. The AAPT/PWT group has fallen from $A332m in the last quarter of 2006 (AAPT $282m, PWT $50m) to $A311m – a drop of 6.3% in a year – driven by a drop in consumer customers from 410,000 to 347,000[15.4%]. The move of AAPT’s customers to PowerTel’s network to reduce the costs of buying wholesale services from Telstra is not panning out too well. This seems largely due to Telstra’s more aggressive wholesale pricing strategy.
The merger of AAPT and PWT billing systems has proven a real headache, and the service management center is overwhelmed due to insufficient staff to handle the increased call load, after radical head count slashing.
AAPT’s new management [ex PowerTel] are hoping to bouy the boat by reducing operating costs to maintain EBITDA to offset reduced revenue.
And things on the New Zealand side don’t look much better, with slowing market share and resources focused on the upcoming ‘Separation Day’ 31 March when Telecom will split into 3, as well as the hefty rollout project of nationwide fibre broadband. With aggressive moves by Vodafone into the wireless and wired broadband space, the convergence advantage held by Telecom is rapidly eroding.
And of course…there are the rumors of a third network operator about to land upon the Long White Cloud.
One could expect increasing stress and tension for management teams in both NZ and Australia, and between the two.